Annuities are one of the most used of the valuation formulas in finance. There are 7...

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Finance

Annuities are one of the most used of the valuation formulas infinance. There are 7 characteristics or factors that we need tolook for when determining the correct formula to use. Name 5 of thecharacteristics that you need to look for and explain theirimportance when solving a problem.

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1 Age The age of the buyer of an annuity is an extremely important factor in any determination of whether that annuity is suitable In the case of an immediate annuity payable for life the age of the annuitant will determine the amount of each annuity payment If the proposed annuitant is not in good health or if his or her family health history suggests a shorter than average life expectancy the advisor should question whether a nonunderwritten life annuity is appropriate For such an applicant a fully underwritten annuity where the amount of annuity payments would take into account the annuitants health status might offer a substantially greater benefit than a nonunderwritten contract If the contract being proposed is a deferred annuity the age of the prospective owner and of the prospective annuitant if different are relevant factors Many insurers will not issue a deferred annuity contract if the proposed annuitant is older than a certain age which in the authors experience accounts for many contracts where the annuitant and owner are different individuals This can create problems Even where the prospective owner and annuitant are the same individual the age of that person is relevant to the suitability of a deferred annuity The NAIC and insurance regulators of many states have issued consumer alerts warning seniors of deceptive sales practices and in many See Answer

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Annuities are one of the most used of the valuation formulas infinance. There are 7 characteristics or factors that we need tolook for when determining the correct formula to use. Name 5 of thecharacteristics that you need to look for and explain theirimportance when solving a problem.

Annuities are one of the most used of the valuation formulas in finance. There are 7...

80.2K

Verified Solution

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Finance

Annuities are one of the most used of the valuation formulas infinance. There are 7 characteristics or factors that we need tolook for when determining the correct formula to use. Name 5 of thecharacteristics that you need to look for and explain theirimportance when solving a problem.

Answer & Explanation Solved by verified expert

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